An activity or factor with a *quantifiable relation to costs incurred in the achievement of an organization’s objectives. For example, the number of hours for which a production machine operates may be related to production costs in a manufacturing process. In *absorption costing methodologies, production volumes tend to be used as a cost driver to allocate costs to products, while *activity based costing (ABC) uses activities (like machine hours) as cost drivers.

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Cost driver — A cost driver is the unit of an activity that causes the change of an activity cost. The Activity Based Costing (ABC) approach relates indirect cost to the activities that drive them to be incurred. In traditional costing the cost driver to… … Wikipedia

cost driver — In a system of activity based costing, any factor such as number of units, number of transactions, or duration of transactions that drives the costs arising from a particular activity. When such factors can be clearly identified and measured,… … Accounting dictionary

cost driver — In a system of activity based costing, any factor such as number of units, number of transactions, or duration of transactions that drives the costs arising from a particular activity When such factors can be clearly identified and measured, they … Big dictionary of business and management

cost driver — / kɒst ˌdraɪvə/ noun a factor that determines how much it costs to carry out a particular task or project, e.g. the amount of resources needed for it, or the activities involved in completing it … Marketing dictionary in english

Activity Cost Driver — A factor that influences or contributes to the expense of certain business operations. In activity based costing (ABC), an activity cost driver is something that drives the cost of a particular activity. A factory, for example, may have running… … Investment dictionary

Cost reduction — is the process used by companies to reduce their costs and increase their profits. Depending on a company’s services or Product, the strategies can vary. However, it is important to remember that every decision in the product development process… … Wikipedia